TV Shows Have Never Looked Better. TV Ads Haven't Kept Up
Too many TV spots today look cheap. As an ad guy, it pains me to write that. But the reason TV spots look so cheap today is TV shows don't look like TV shows anymore—they look like big-budget movies.
It wasn't always this way. If you're a Gen-Xer like me who grew up watching The A-Team and Knight Rider, with their comically bad explosions and endless parade of poorly lit medium closeups, you know what I mean.
But even if you occasionally stream a '90s episode of Law & Order, you'll notice a stark contrast in the production values with current shows. The lighting, cinematography, art direction, music and special effects of the average Hulu series are light years away from the days when networks cranked out hour-long episodes on 16mm film. And that's a challenge for brands investing in broadcast advertising, because these slickly produced programs are juxtaposed with TV spots. And right now, if we're honest with ourselves as an industry, the comparison isn't flattering.
The fact is, ad production budgets haven't kept up with TV production budgets. In 1999, the networks spent an average of $1.3-$1.8 million per episode on hour-long shows. That same year, the average 30-second network TV spot cost $343,000 to produce. So, 20 years ago, a single network spot cost about 20 percent of a single network episode.
Today, it's not unusual for networks to spend $5 million on a single episode of a one-hour series. So if ad budgets had kept pace with TV budgets, the average spot should cost over $1 million. That's obviously not the case—and I'd wager most of the ads that air regularly on Hulu were produced for less than what advertisers were spending on production in 1999 (over $600,000 in today's dollars).
The disparity gets even more pronounced when you consider premium streaming services like Netflix and Disney+, which spent $13 million and $15 million per episode on their shows Stranger Things and The Mandalorian. "But those platforms don't have ads," you might say. I say that doesn't matter. Because those series have raised the bar for what's on TV—and if you're doing filmed advertising, that's the standard the audience is going to hold you to. It's not fair, but there it is.
All of this matters because if you have a cheaply made ad airing next to a lavishly produced TV series, it makes the product look cheap, the brand look cheap, and overall, the ad has less impact.
So why did ad production budgets shrink? I think there are a few reasons.
First, in our trillion-channel mediaverse, network audiences shrank, so media has gotten much cheaper. In 2005, NBC could command $479,000 for a 30-second spot on ER, its top-rated show. Last year, a spot on This Is Us, NBC's top-rated show and the third highest-rated series on network television, cost $476,000. Those figures aren't adjusted for inflation—they're actual numbers. So cheaper media and smaller audiences have put downward pressure on production budgets.
Another issue is the unfortunate trend of repurposing pre-roll spots for broadcast. This isn't only the result of advertisers being stingy, it's the consequence of not having creative and media together, under one roof.
Finally, there's a little lie we've told ourselves over the years. It goes something like, "If it's a great idea, the budget doesn't matter." It's one of those adages that's technically true, but let's be honest. Would you rather watch a high school production of Henry V shot on an iPhone or the Kenneth Brannagh feature film? They're both Shakespeare, right?
I know it's hard to believe if you're under 40, but there was a time when many commercials actually looked better than the programming they sponsored. Knight Rider, with all its canned sound effects and bad hair, debuted in 1982—the same year Ridley Scott shot this remarkable spot for Chanel No. 5. It jumped off the screen in part because the production values were superior to just about anything that was on TV at that time. It's a shame—and to our industry's detriment—that rarely happens anymore.